Consumers were also less optimistic about financial conditions with both the current and the future conditions indexes falling 2.6 per cent and 1.8 per cent, respectively.

ANZ's head of Australian economics David Plank says the decline was to be expected after US equity markets on Friday record the biggest weekly drop in two years.

The plunge started on Tuesday when the Dow Jones Industrial Average suffered its biggest one-day decline in history.

The negative sentiment trickled through to the Australian share market which on Tuesday saw its worst one-day fall in more than two years and wiped around $66 billion from its value.

"Given the tumble that global and domestic equities took last week, it is unsurprising to see confidence falter," Mr Plank said.

"In particular, views around current economic conditions fell sharply last week, though they remain well above their long-term average."

Mr Plank said that while overall sentiment had risen considerably since the third quarter of 2017, much of it had been driven by an improvement in views towards economic conditions.

In contrast, views towards financial conditions rose at a slower rate over the same period and had recently begun deteriorating due to the lack of pass-through to wages, despite strong employment growth, he said.

"Together with moderating house prices and high levels of debt, household finances remain under pressure," he said.

"(Reserve Bank of Australia) governor (Philip) Lowe's speech last week which, in our view, effectively removes the prospect of a rate hike this year, should provide some comfort."

Mr Plank said the upcoming employment and wage numbers would indicate the tone for confidence in the weeks ahead.